King Solomon’s Approach: Will It Work for Dividing Estate Contents?

January 11, 2010 | Julie Hall

King Solomon was known for his wisdom and ability to make sound decisions. The most famous incident happened when two women came to him with a baby each woman claimed as her own. Solomon’s response was literally to divide the baby so that each woman could have half. This decision did not seem to bother the first woman, but the second woman begged the King to give the baby to the first woman, so the baby could live. Solomon then knew the second woman was the real mother and granted her the child. Will this approach work for families when they are in the midst of grief and making difficult decisions regarding their parents’ possessions?

The “divide and conquer” method is used most often, without knowing the values of estate items. Resentments and rivalries can and will stem from this method. One heir will feel that he or she got gypped. Heirs often begin the process of breaking down the estate and dividing the contents prematurely. First, know what you have and understand its current market value by hiring a personal property appraiser. Second, not all possessions can be divided, so Plan B must be ready to go.

Try to divide possessions equitably. But what if there is one item, say a $7,000 grandfather clock, that 5 children each want to have? As a personal property expert, I have seen two viable options work best.

First, when parents are still living, they should make the decision of who gets the clock. Let all heirs know what is your decision. To minimize some of the upset, if financially feasible, offer cash assets or other physical assets in the appraised amount of the clock to the other heirs. This decision may ruffle feathers, but you may have just prevented a lifelong rift between your children.

If you can’t bear the thought of choosing one heir for the clock, my suggestion might surprise you. Sell the clock and split the proceeds among your heirs. It is equitable, and no one has “the prize”, but all have equal cash assets.

We spend a lifetime collecting and caring for our favorite possessions. Shouldn’t we take the time to make a sound plan for passing them on to heirs? No material possession is worth ripping the family apart!

The Irony of Heirlooms

January 4, 2010 | Julie Hall

You can count on Murphy’s Law when dealing with heirlooms and dividing estate contents — something almost always goes wrong! I’ve had a front seat for nearly 20 years, and seen more than my share of serious feuds, estrangements, the “entitlement mentality”, and the rapid gathering of vultures and other green-eyed creatures. Sibling rivalry, as well as tensions and emotions, are at an all-time high; the executor is generally stuck in the middle, not wanting to ruffle any feathers.

Often, certain family members will take it upon themselves to enter the estate, take what they desire, and leave everyone else in the dark and empty-handed. We’ve all heard the scary stories. One brother locks the other brother out of the house and takes everything in the middle of the night. A sister helps herself to valuable jewelry without asking, or the long lost sibling who returns after 30 years to claim a chunk of the inheritance. All of these scenarios, plus so many more, add fuel to the fire and cause decades of resentment and bitterness.

We all have a connection to this particular issue because we have either been through it, are getting ready to go through it, or are dreading the very thought of it. Unfortunately, when a family member dies, or is approaching death, those who feel entitled come calling. Suddenly, heirs and distant relatives surface that you didn’t know existed, and true colors shine through in various shades of green.

For what reason does this occur over and over again? Is it because of perceived value from generations of family stories that one particular piece has tremendous monetary value? Is it over a sentimental item, like mom’s reading glasses, a family Bible, or a wedding band? Do people want these items because they feel the loved one who died is still close by? Or is it plain old greed?

Here’s the irony: People are fighting over things they can’t take with them either. We exit this world the way we came into it, with no material possessions.

Read my solution in the next blog entry below!

The Solution to the Irony of Heirlooms

January 4, 2010 | Julie Hall

We spend a lifetime collecting and caring for heirlooms, yet we rarely take the time to make a plan for them once we pass away. We allow our children to fight over them, instead of making wish lists and talking with them about their wishes.

Some will argue that their 3-year old grandchild will want these heirlooms thirty years from now. If I were a betting lady, I would disagree! The younger generations have no desire for china, silver, crystal, etc. They prefer IKEA, Pottery Barn, and Crate and Barrel to grandmother’s “old stuff.” Though we have fond memories of heirlooms, our homes are already too full, and 70% of our stuff we will never use. So, let us ponder for a minute: How will our children handle our estate when our time comes?

Planning is the key to a smoother division of property and estate settlement.

Enlist the assistance of an estate planning attorney. This is no time to be frugal.
Choose an appropriate executor who will get it done, remain firm, and honor the decedent’s wishes.
Hire a personal property appraiser to ascertain what has value vs. what doesn’t.
Base the division of personal property on equitable distribution to keep it as fair as possible.
Read The Boomer Burden – Dealing with Your Parents’ Lifetime Accumulation of Stuff, perfect for clients, attorneys, heirs, and parents.

The Risk of Procrastination

November 30, 2009 | Julie Hall

“When the boat reaches midstream, it is too late to mend the leaks.” — A Chinese proverb

Mary was 96 years old and had a lovely 3 bedroom home filled with antiques passed down from previous generations. With great pride, Mary had done everything right with these heirlooms. She left all items in their original good condition (never refinished or restored them), knew all the history of each piece, kept them out of direct sunlight and away from heat vents, never placed them in the attic.

But Mary made a huge error along the way: she procrastinated making an estate plan for her assets and preparing for her own death. In fact, Mary didn’t even have a legal will.

I remember meeting Mary about 6 months prior to her passing. Her two children were present, and everyone wanted to know the values of Mary’s lovely possessions. The children hoped that my visit would convince Mary of her urgent need to prepare a will, so her wishes would be known and fulfilled after her death. At length, I spoke with Mary about the importance of preparing all her wishes for her children. I even offered the name and number of an estate attorney who would be willing to come to her home.

I made the assumption that at 96, Mary had accepted her advanced age and her close proximity to death. However, Mary had a great deal of difficulty accepting her mortality. “I do not need a will. I have written my wishes for my children on a piece of notebook paper, and that is good enough. If it isn’t good enough, then my kids will just have to fight over it.”

The children looked at me and grimaced. They knew the complications that awaited them if mom did not get legal assistance to prepare her last wishes and plans. These complications can be years of red tape, tremendous financial pressures to settle the estate, etc. This is simply not fair to do to children!

What happened with Mary’s estate? No one ever found her handwritten will, and it became a nightmare for the family. It became a litany of “Mom said I could have this” or “No, she promised that to me.”

Mary’s reasons for procrastination will never be known by any of us. Some are afraid of even talking about death. We shouldn’t be; it is a certainty. The older generation seems to be parted into three groups: Those that are completely prepared, those who won’t even discuss it, and leave it all on their children’s shoulders, and those that simply sit on it for years and procrastinate on the inevitable. For those in the last two groups, life will be most difficult for your children or heirs, upon your demise.

For trustworthy advice on these issues and much more, please click on the right side of my blog at “The Boomer Burden” and order my book.

Leaving a Legacy of Love

November 23, 2009 | Julie Hall

Anne and Bill are a wonderful example of parents being prepared. Both are in their mid-seventies, in relatively good health, have two children, several grandchildren, and are geographically remote from their family. They knew that if, or when, something happens to them, their children would have to journey to get there and assist. Wanting to make life easier for their kids, they decided to make sure their children understood their wishes.

This couple has been married 52 years, very hard working middle class, who saved a great deal of their money, invested it, and wanted their assets protected. When it came time to downsize their home to move into a smaller one, they de-cluttered their home, sold most of their belongings, and lived comfortably on what they needed. Anne no longer has a need for all the silver plate, china, etc. and preferred the space to the clutter.

They hired a financial advisor to assist them with decisions, an estate planning attorney to create a revocable trust, and told their children that everything is in writing and gave them each a copy. The trust clearly states who is the executor, and who is the health care power of attorney. Both children were clear on their part of the responsibility. It was very difficult for their children to listen to what their parents’ last wishes were. Yet, they knew they owed that to their parents.

Each child has a file containing all the vital information of their parents’ estate and guidelines within, even down to funeral arrangements, music to be played, and how many death certificates to order. This file remains in their file cabinets, hopefully for many years to come, but is easily accessible if (and when) the fateful phone call comes.

Do you see the ease with which the children have already been prepared, thanks to this wonderful set of parents? For parents to give this much thought into their own mortality cannot be easy from anyone’s perspective. Their actions toward their children were kind, generous, accepting, and loving. Their only wish was to ease their children’s burdens, when they were in the midst of grief, estate dissolution, selling the home, travel, etc.

These are two very fortunate children to have everything spelled out for them when a time of crisis occurs. I should know, as Anne and Bill are my parents! Thanks, Mom and Dad, for loving us that much!

Seniors, their children, stuff, and grief

September 14, 2009 | Julie Hall

In my work of helping seniors appraise the worth of their personal property, or liquidating it, I have seen examples of unsavory human behavior during the process. This comes from family, friends, neighbors, or strangers.

In dealing with a lifetime accumulation of stuff, seniors are often at a vulnerable place in their lives and daunted by the task. That’s when predators appear, driven by insensitive greed and persuasive powers. These unscrupulous mischief makers could be stopped in their tracks if only the senior had the knowledge of how much their personal property was worth. They should also proactively create a master list of what they perceive to be treasures – either sentimental or financial.

When seniors have avoided making these choices by doing nothing for their estate planning and distribution, they are actually making a decision with dire consequences. I always recommend that seniors distribute their treasures personally now, or in writing for distribution at death. When the gift is personally made, however, they have the satisfaction of seeing the joy on the face of the recipient!

If a personal transaction is not done, then the next best thing is to write down who gets what on a master list. This master list should be kept safely with the will. Both documents will almost always minimize family disputes and exploitation.

Problems generate when the children or close relatives are burdened with dealing with the death of the senior, the pressure of dealing with the estate, and the overwhelming task of disposing of the personal property. Seniors who recognize their own responsibility in this matter and make the decisions themselves are practicing the best defense against family quarrels or exploitation in any guise!